Wary Restaurant Brands lowers guidance despite rising sales

Restaurant Brands lowers guidance
Expectations are lowered despite rising sales. (Source: Bigstock)

Restaurant Brands New Zealand has lowered its NPAT guidance for FY23 to $12-16 million despite a growth in sales in most markets.

Total sales for the second quarter to June 30 jumped by 7.1 per cent to $331.6 million, reflecting ongoing post-Covid recovery and price increases implemented across all markets.

Sales for New Zealand were $142.9 million, up 7.2 per cent in total and 4.7 per cent on a same-store basis, driven by price increases and the relaxation of pandemic-related trading restrictions.

The number of stores in New Zealand remained constant during the quarter at 143.

Despite the positive results, Restaurant Brands predicts that recovery in the second half will be weaker than expected as it continues to face global inflationary pressures, which is having a significant impact on profits.

Cost increases in the New Zealand business and lower sales growth in the US market are among other factors.

The company says it has implemented price increases and cost control strategies but has yet to offset input cost surges.

“We acknowledge this adjustment will be disappointing for shareholders,” said Jose Pares, Restaurant Brands New Zealand chairman.

The board of directors wishes to provide assurance that the company is diligently managing these short-term challenges and have full confidence in the new leadership team to deliver on our strategy to provide continued long-term shareholder value.” 

Restaurant Brands New Zealand Limited operates the New Zealand outlets of KFC, Pizza Hut, and Carl’s Jr together with KFC in Australia, KFC in California, and Pizza Hut and Taco Bell in Hawaii, Guam and Saipan.

Author: Sean Cao. This article was first published on sibling website Inside Retail.